Don't fall into the trap of thinking you're automatically covered under your existing home insurance policy because most home insurance policies have exclusions against any loss or damage to the existing house if it arises from construction work.
Pretty much every insurance policy in Australia has what’s called a Duty of Disclosure where if your risks have changed substantially you have to let your Insurer know.
So when it comes to doing an extension or renovation you HAVE to contact your home insurer and tell them this – this is what I’m doing, here’s the value of what I’m doing, will you cover me if this damages my house (existing structure)? And, will my policy even continue?